Budget hearings are ongoing in Trenton as disappointing job numbers are being revealed. Former New Jersey State Treasurer and budget analyst for NJ Policy Perspective David Rousseau said he believes the final budget will likely be very similar to Gov. Chris Christie’s proposal. He sat down with NJ Today Managing Editor Mike Schneider to discuss economic activity in the state.
Rousseau said the jobs reports currently being released, which show the weakest job creation in seven months, focus on current and future economic conditions. He said the reports lead to “a key point in the budget process three weeks from now when both the Office of Legislative Services and the state treasurer will come back in and give their revised revenue estimates, not only for the rest of this year … but the future growth. And that’s really where OLS, the Office of Legislative Services, and the treasurer differed in March was the future economy.”
The OLS and Christie disagreed on the amount of revenue for the state by about $500 million. Rousseau said over a two-year period, that amounts to roughly 1 percent of the state’s revenue. While the percentage is low, Rousseau said there is still a reason for concern.
“He’s [Christie’s] only counting on a $300 million surplus so if he’s off by $500 million, the surplus goes away and we have to have a balanced budget in the state so we’ll have to have some action taken if there’s any drop in revenue when they come back in three weeks,” Rousseau said. He explained that the treasurer and legislature would have to find spending reductions or savings in the current or future year to offset the gap.
Rousseau said the economic situation today is much better than it was in the past. “We’re definitely nowhere near what was dealt with in 2008 and 2009 and then early 2010 when Governor Christie came on board,” he said.
Rousseau said no one administration is to blame for the economic situation in New Jersey, citing a series of decisions that led to the downturn, starting in the Thomas Kean administration. He explained that there was a significant shortfall in the last budget during the Kean administration that Gov. James Florio had to deal with by raising taxes, along with increasing school aid because of a court decision. Then Gov. Christine Todd Whitman cut taxes but funded it with some changes to the pension system. “And then later did the infamous pension bond proposal in 1997,” Rousseau said.
The former treasurer said he believes Christie’s budget will remain mainly intact.
“I think we’ll see the governor’s budget somewhere around where it is. There are some issues out there that people are going to want to deal with,” Rousseau said. “The overriding issues that are out there that don’t have a great effect on this year’s budget is the competing tax proposals.”
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